INCORPORATING A COMPANY IN INDONESIA

A COMPREHENSIVE ROADMAP

Below is an advanced, methodically detailed roadmap for incorporating a corporate entity, either a local PT (Perseroan Terbatas) or a foreign-owned PMA (Penanaman Modal Asing), in Indonesia. This roadmap systematically delineates the critical steps, specifies anticipated timelines, explicates requirements pertaining to office facilities (physical or virtual), enumerates necessary corporate contacts, and underscores essential legal procedures.

 

1. Establishing Corporate Structure and Business Scope

 

1.1 Legal Entity Selection

  • PMA (Foreign-Invested Enterprise): Permits foreign shareholding from partial to full ownership.

    Time Frame: Approximately 1-3 days to finalize structure and capitalization.

1.2 Defining Business Activities (KBLI Classification)

  • Select suitable KBLI codes corresponding to intended operational activities.

  • Common examples:

    • Consulting/Management (KBLI 70209, 74902)

    • Marketing/Advertising (KBLI 73100)

    • Real Estate (KBLI 68111)

    • Wholesale Trading (KBLI 46xxx)

  • Verify alignment of chosen KBLI codes with local zoning regulations, typically via a consultant or notary.

    Time Frame: Approximately 1–2 days.

1.3 Shareholding and Capitalization Requirements

  • PMA Entities: Frequently advised to have at least IDR 10 billion in authorized capital for eligibility of investor KITAS, although the exact requirement may vary.

  • 1.3 Capital Requirements (Updated Regulation)

    Based on BKPM Regulation No. 5 of 2025:
    Minimum paid-up and placed capital is IDR 2.5 billion, unless other sector regulations require more.

    Important conditions:

    • The paid-up capital cannot be withdrawn for 12 months
    • Funds must remain in the company bank account
    • Funds may only be used for:
      • Business operations
      • Asset purchases
      • Building construction

    Confirmation is made through a self-declaration in the OSS system.

    Capital Deposit Timing

    • Usually within 60 days after incorporation, or
    • Immediately after the company bank account is opened

  • Local PT Entities: More flexible capitalization, subject to provincial or local stipulations.

    Time Frame: Approximately 1–2 days for capital structuring.

 

2. Document Preparation and Verification

 

2.1 Shareholder Identification Documentation

  • Indonesian Nationals: KTP (identity card), NPWP (tax number), and Kartu Keluarga (family card), if required.

  • Foreign Nationals: Passport, plus KITAS/ITAS if residing in Indonesia.

2.2 Corporate Name Availability

  • Propose multiple name options (preferably three, each with three words).

  • Check availability through a notary, who will verify in the Ministry of Law and Human Rights (AHU) system.

2.3 Registered Office Address

  • Physical Office Requirements: Must comply with local zoning regulations; may require a building permit (PBG) and certificate of building compliance (SLF).

  • Virtual Office Utilization: Ensure the office provider’s location is zoned to accommodate the selected KBLI.

    Time Frame: Approximately 2–7 days.

2.4 Drafting Corporate Deed (Akta Pendirian) and Ministry Approval (SK Kemenkumham)

  • Notary prepares deed; shareholders sign in person or via Power of Attorney.

  • Notary submits deed for approval to the Ministry of Law and Human Rights.

    Time Frame: Approximately 1–7 days.

 

3. Legal Incorporation and Procedural Formalities

 

3.1 Execution of Corporate Deed

  • Coordinate an appointment with the notary for formal execution.

  • Shareholders outside Indonesia may sign via Power of Attorney.

    Time Frame: Approximately 1–2 days.

3.2 Ministerial Endorsement (SK Kemenkumham)

  • Notary files the deed electronically for official ratification.

  • Approval typically takes 1–3 business days, barring system delays.

3.3 Corporate Tax Registration (NPWP)

  • Register the newly established entity at the appropriate tax office.

  • Often requires at least one Indonesian shareholder or a foreign director with KITAS and personal NPWP.

    Time Frame: Approximately 3–5 days.

3.4 Online Single Submission (OSS) System – Acquisition of NIB and Business Licenses

  • Create OSS account, generate Business Identification Number (NIB).

  • Upload relevant documents, confirm zoning compliance, and finalize licensing.

    Time Frame: Approximately 1–7 days.

3.5 Acquisition of Sector-Specific Licenses

  • Requirements vary by KBLI code: real estate (PBG, PKKPR), education sector permits, import licenses (API-U), or short-term accommodation (Pondok Wisata).

    Time Frame: Typically 2–12+ weeks, subject to local regulations.

 

4. Comparative Office Space Requirements

 

4.1 Virtual Offices

  • Common in major commercial zones or business districts, including Bali.

  • Must produce a domicile statement (surat keterangan domisili) to validate the address.

4.2 Physical Offices

  • Must be situated in an area zoned for commercial activities and adhere to building regulations.

  • Certain sectors necessitate building permits (PBG) and usage certificates (SLF).

 

5. Essential Corporate Contacts

  • An Indonesian mobile phone number is needed for OSS verification.

  • Official corporate email for communications with AHU and OSS.

  • Foreign directors should have local sponsorship or personal NPWP if holding an investor KITAS.

 

6. Integrated Timeline Summary

  1. Documentation and Preliminary Preparation: 1–2 weeks.

  2. Corporate Deed and Notarial Procedures: 1–3 days.

  3. Ministerial Approval (SK Kemenkumham): 1–5 days.

  4. Tax Registration (NPWP): 3–5 days.

  5. OSS Registration: 1–7 days.

  6. Sector-Specific Licensing: 2–12+ weeks.

 

7. Post-Formation Responsibilities

  • Register employees for BPJS Ketenagakerjaan (employment insurance) and BPJS Kesehatan (health insurance).

  • Maintain ongoing tax compliance and satisfy any routine reporting or licensing obligations required by local authorities.

 

8. Consultative and Regulatory Contacts

  • Notaries, OSS consultants, and tax specialists can facilitate sustained corporate compliance.

Disclaimer

  • This information is intended as a general roadmap only and does not constitute legal, tax, investment, or regulatory advice. All incorporation procedures, licensing requirements, capital obligations, and estimated processing timelines in Indonesia are subject to change in accordance with prevailing laws, government regulations, OSS system policies, and the interpretation or discretion of the relevant authorities.
  • The final requirements applicable to each company may differ depending on its KBLI classification, business sector, ownership composition, office location, zoning status, and operational model. Therefore, the information contained in this document should not be interpreted as a guarantee of approval, timeline, or outcome.
  • Hepta Solutions shall not be held responsible for delays, rejections, changes in regulatory interpretation, or additional compliance requirements imposed by government institutions or third parties during the incorporation and licensing process. A case-by-case review may be required before final implementation.

Concluding Advisory

Comprehensive due diligence, strict adherence to zoning and licensing protocols, and proactive communication with regulatory bodies facilitated by expert guidance from Hepta Solutions are instrumental for a successful and smoothly functioning corporate structure within Indonesia

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